"O what a panic's in thy breastie!" wrote Robert Burns to a mouse in 1785. Today the VIX reflects the fear in investors' breasts that European default scenarios will disrupt the best-laid schemes o' mice an' men. The VIX, short for the Chicago Board Options Exchange Market Volatility Index, measures implied expectations for the S&P 500 Index's volatility over the next 30 days.

Fearsome: The VIX, known as the fear gauge, has resumed its push higher on increased concerns about European instability.

The VIX is like "fire insurance" for stocks, says Bob Whaley, the Vanderbilt University professor who developed the VIX in 1992 for the CBOE. Its level of 16 a month ago seemed low to him; lately, increased chances Greece would leave the euro have pushed it to 27. Friday, it stood at 21.57, but Whaley says a spike near 40 wouldn't be unreasonable if events in Europe worsen.

Eugene Mueller, a former CME Group research director who runs Omega Financial Training, told clients in mid-May to go long the VIX: "We're heading into market uncertainty.…Absolutely stay away from fixed income." Though volatility expectations aren't likely to reach the frightening levels of 2008, stock investors may want to heed Ed Altman, finance professor at New York University, who points to an increased correlation between stocks and high-risk bonds.

Sunday 17

Greece votes to elect a government, which will decide whether the country will stay within the common currency. The former prime minister predicted a Greek exit would push the country toward a "vortex of self destruction."

France holds Parliamentary elections. The success of the Socialist president's agenda depends on the support he wins in Parliament to push it through.

Week's Highlight

Sunday 17: Greece holds a fateful election to determine its membership in the European common currency. Markets will focus on Europe all week ahead of the election. France also goes to the polls.